Global Net Zero Tracker Report
The MSCI Sustainability Institute releases the Global Net Zero Tracker Report, which aims to analyze the net zero progress of listed companies around the world.
MSCI believes that 2023 is the hottest year in global history, with greenhouse gas emissions at an all-time high (59.8 billion tons). Based on the current net-zero path, global temperatures will rise by 3 degrees Celsius by the end of this century.
Related Post: Asian Investor Group on Climate Change Releases Net Zero Investment Report
Global Net Zero Tracker for Listed Companies
MSCI notices that a growing number of listed companies are setting science-based climate targets. 20% of listed companies have published net zero targets in line with the Science Based Targets initiative (SBTi), an increase of 8 percentage points from last year. 38% have published net zero targets that are not SBTi compliant (up from 37% last year), while a further 52% have published climate targets but have not provided a net zero plan.
From the industrial perspective, the utility industry (63.3%), materials industry (44.8%) and energy industry (44.5%) have made rapid progress in formulating net zero goals, while the financial industry (34.9%) and technology industry (34.1%) the medical industry (21.1%) have made slower progress. These data are related to the carbon emission characteristics of specific industry.
In terms of greenhouse gas emission data disclosure, 60% of listed companies disclosed Scope 1 and Scope 2 data, an increase of 16 percentage points from two years ago. 42% of listed companies disclosed Scope 3 data, of which the proportion of disclosures related to the upstream supply chain was greater than the proportion of disclosures related to the downstream supply chain. Although there are not many mandatory disclosure requirements for Scope 3 data around the world, these data can help investors understand more about climate-related risks and opportunities.
Global Net Zero and Warming Targets
Since the Paris Agreement set the warming targets of 2 degrees Celsius and 1.5 degrees Celsius, current global carbon dioxide emissions have reached 90.1Gt, and the warming rate has reached 1.35 degrees Celsius. There is still 28.9Gt of emissions space to reach the 1.5°C warming target, and 200.5Gt of emissions space to reach the 2°C warming target.
Based on current global carbon emissions, the world will hit the 1.5°C warming target in July 2026 (27 months from now), and 203 months later, the world will hit the 2°C warming target. MSCI measures the implied warming of listed companies around the world and finds that 38% of companies have emission trajectories corresponding to the 2°C warming target, and 11% of companies have emission trajectories corresponding to the 1.5°C warming target. But with another 51% of companies unable to meet these targets, global emissions trajectories still correspond to the 3°C warming target.
The warming targets for developed markets are generally between 2.5 degrees Celsius and 3.1 degrees Celsius, while those for emerging markets are between 3.3 degrees Celsius and 3.7 degrees Celsius. From an industry perspective, the energy industry and materials industry have seen the most obvious warming. To meet the goals of the Paris Agreement, global carbon emissions need to peak next year and fall by 7% annually from 2025 to 2030.
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